Public-private lines blurred at New Orleans City Hall under Nagin

One of New Orleans Mayor Ray Nagin's most audacious moves upon taking office in 2002 was to hire Greg Meffert as the city's first chief technology officer and allow him to install a band of smart, well-paid geeks to overhaul the city's dusty old technology systems.

If some of Nagin's initiatives had more bark than bite -- such as his crackdown on corruption in the Taxicab Bureau -- this one was a bit different. Letting Meffert's techies take over a city function, while operating outside the strictures of the Civil Service Commission and its many rules, was practically revolutionary.

The rationale was simple. The kind of high-tech horsepower Nagin and Meffert wanted was unavailable in the ranks of civil-service job-holders. The swaggering Meffert, who had never worked in government and boasted of having cashed in on the dot-com boom, mocked the sluggishness of the public sector. A true overhaul would require highly paid, creative people from the private sector, they argued -- perhaps correctly.

But as more details emerge about Meffert's connections and actions -- from an alleged web of favoritism in his office, to the fancy boat party he set up for Nagin, to the Hawaiian vacation that Nagin says Meffert purchased for both of their families, possibly with the help of a private company -- questions are resurfacing about the ways in which Meffert and the mayor allowed information technology subcontractors to play simultaneous dual roles: city bureaucrats and entrepreneurs.

Most of the technological advances Meffert pushed during his four-year tenure were spearheaded by teams of contractors and subcontractors who supplanted civil-service employees even as they worked in the same offices and flashed the same city business cards.

"Most people worked under the assumption that while they actually worked for another company, they worked for the city of New Orleans," said one subcontracted employee from Meffert's days who spoke on the condition of anonymity.

Honor-system problems

But problems with that honor-system arrangement arose when companies run by Meffert's friends, primarily Mark St. Pierre and his partners at Imagine Software, took on the most crucial supervisory jobs. They did not directly hold contracts with the city. They flew under the radar by working for lead contractors ACS State and Local Solutions, Science Engineering Associates and Ciber Inc., though they reported directly to Meffert.

In a report released in February, the city's independent inspector general alleged that "the subcontracts appeared to be little more than a mechanism for directing payment from the city to Imagine and its related companies."

The city's Civil Service Commission was concerned about private employees ensconced in Meffert's office almost from the start.

In July 2003, the commission responded to complaints by civil servants that Meffert's private-sector hires were making them obsolete, giving them orders, taking over their desks and forcing them to wander the halls. When the commission sought answers, Meffert testified that the subcontractors were temporary and that permanent civil service employees would be trained to take over those tasks.

But that never occurred. The civil servants are still relegated to handling the old-fashioned mainframe, hardware support and customer service on the management information systems side of the technology office, while key contracts, city networks and more modern Web-based processes remain outsourced.

Nagin, meanwhile, made it clear that he was wholly committed to Meffert's new, privatized tech-world order when he e-mailed then-Personnel Director Mike Doyle in July 2003.

"I must tell you that this matter causes me to question the willingness of the commission to embrace the change that the citizens are demanding. How this matter is handled will be a defining moment for the commission and this administration," Nagin wrote.

"As far as I can tell Mr. Meffert's plan has improved services to citizens and has substantially improved our MIS operation. ... This is a line in the sand type of issue."

The commission backed down, and Meffert was allowed to proceed.

Audits, e-mails surface

Nagin's line in the sand would have been simply a policy controversy, a split over the merits of privatization, if it hadn't been for the evidence of cronyism and possible self-dealing that has surfaced in recent audits and e-mail correspondence.

Some of the tech specialists Meffert brought to City Hall had worked for him in the private sector, and city e-mails and interviews indicate that a tight cadre of his closest associates represented themselves as city employees in conversations with officials in other cities and even with the contractors whose work they oversaw.

Meffert, meanwhile, in his role as a public official, talked up his friends' work in New Orleans to his counterparts in other cities, even when that work had actually been mostly performed by others.

Meffert tried to get his buddies work installing crime cameras in Baton Rouge, Houston and Chicago, all by trumpeting the star-crossed project he had them overseeing in New Orleans. E-mails show Meffert coordinated travel plans to Houston with Mark St. Pierre, a city tech subcontractor who had worked for Meffert in the private sector and went on to lead three related firms that earned money from no-bid city technology work: Imagine, NetMethods and Veracent.

A lawsuit pending in Orleans Parish Civil District Court alleges that Meffert and his private-sector subordinates conspired to take business from Southern Electronics and Active Solutions, companies they oversaw on the crime-camera contract. The Times-Picayune has intervened in the lawsuit, seeking to lift a protective order that keeps some court records -- including Meffert's three-day deposition -- shielded from public view.

Matt Hyde, Meffert's counterpart in Houston's technology office, has said everyone who came to meet with him in Houston to pitch the project gave him city of New Orleans business cards. He said he passed on the deal partly because he was confused about who they were representing.

And this wasn't limited to one-time meetings. Carlo MacDonald is the head of a Baton Rouge technology firm who brought a new crime camera network to downtown New Orleans, then worked as a subcontractor on the city's camera project from 2004 to 2006. He said it took most of the first year for him to discover that the person he reported to at the city, Chris Drake, was actually an employee of St. Pierre's Imagine.

By the time he realized it, MacDonald said, he wasn't being paid in a timely manner and Imagine began to represent itself as the company that came up with the project. Before long, MacDonald left the project in disgust, and St. Pierre's company, operating under a new name, Veracent, took over the work MacDonald had been doing.

Meffert's attorney, Randy Smith, has said his client "contributed tremendously" to the city during his tenure, which ended in 2006, and will be "vindicated" in the end. St. Pierre has not responded to numerous phone messages.

'Fundamental confusion'

Records show that Drake signed his e-mails "City of New Orleans, Mayor's Office of Technology." Drake, St. Pierre and other subcontractors all had e-mail accounts on the mayorofno.com server, just like Meffert and other public employees appointed by Nagin.

"I've never seen that arrangement," said MacDonald, who has done similar work for several cities, including Los Angeles. "I've seen consultants work for cities and help out with projects, but I've never seen where the whole city (IT) operation is subcontractors."

Janet Howard, president of the Bureau of Governmental Research, agreed that the fuzzy nature of the techies' employment was questionable.

"I don't think there should be a fundamental confusion about whether someone is a private contractor or a city employee," she said.

In July 2004, when Southern Electronics and MacDonald's Verge Wireless were still setting up New Orleans' camera project, they made a presentation for a similar project to the city of Baton Rouge. In e-mails, Drake tells MacDonald that he helped set up the meeting by expressing support for the contractors' New Orleans work.

But Southern and Verge didn't get the deal, and a year later Meffert's e-mails show that he stepped in on behalf of St. Pierre's NetMethods and offered to arrange a meeting between Nagin and Baton Rouge Mayor Kip Holden on the issue.

Whether or not the meeting occurred is unclear, but Baton Rouge purchased a block of 58 cameras from NetMethods.

'A very tricky situation'

Private employees continued to play dual roles after Meffert left the office he created, and some of them got twisted into ethical pretzels as a result. Ron Norris, who worked for tech office subcontractor Technology Consortium Group as manager of the crime-camera project in 2007 and 2008, also worked for the lead contractor, LSI Research Inc., as its director of delivery.

"I was in a very tricky situation. ... I had to be honest on both sides (the city and LSI) ... and at times it was quite difficult. ... I had two hats to wear," Norris told auditors commissioned to look at the crime-camera contracts by the city's chief administrative officer, Brenda Hatfield.

Hatfield also told investigators that she didn't know how many subcontractors were working permanently in the Mayor's Office of Technology, according to a source close to the investigation. Hatfield did not immediately reply to an e-mail requesting confirmation.

Keeping track of such things and managing the contractors' performance has always been Hatfield's job, said Gilbert Buras Jr., a governmental law expert with 29 years of experience at City Hall, most recently as the Civil Service Commission's attorney.

"If someone with a city contract is overseeing his own contract work for the city and is out there with a business card representing that he is somehow an official or employee of city of New Orleans, I think that is reprehensible and may be something the district attorney should look at," Buras said.

Howard of the BGR said she thinks there are ways for City Hall to properly work with private-sector partners, but not without clear lines of demarcation.

"Privatizing certain functions is an acceptable practice," she said. "Payroll, for instance, often gets privatized. The concept per se isn't the problem. But you have to manage it."

The Rev. Kevin Wildes, president of Loyola University and chairman of the city's Ethics Review Board, had a similar view.

"If nothing else, there were huge conflicts of interest all over the place" in Meffert's tech office, he said. "I really still do believe in public-private partnerships, but you have to have the right firewalls in place."

For Buras, the mayor's 2003 e-mail to the Civil Service Commission seemed to indicate those walls were purposefully knocked down. The legal responsibility, he said, falls on Nagin.

"Section 4-206 of the Home Rule Charter says the mayor shall 'see that the terms of all contracts are faithfully executed.' In my opinion, he can't delegate that to a nongovernmental employee," Buras said.

David Hammer can be reached at dhammer@timespicayune.com or 504.826.3322.